Plans call for hotel at Presidential Towers

(Crain's) - A Chicago real estate investment firm that bought Presidential Towers last year is planning a hotel conversion of one of the towers in the massive apartment complex on the edge of the West Loop.

A joint venture led by Waterton Associates LLC plans to convert a portion of the nearly 600-unit tower on the northwest corner of Des Plaines and Monroe streets into an extended-stay hotel, confirms David Schwartz, a co-founder and managing member of the firm. The plan must still be approved by the city.

The hotel conversion would be part of a complete redevelopment of the four-tower complex, which would also include a roughly 40% increase in the amount of retail space, to about 200,000 square feet, he says.

How many hotel rooms would in the building at 625 W. Madison St. has not been determined, he says. But Waterton is also planning to consolidate into that building about 270 corporate housing units that are currently located throughout the 2,400-unit complex, he says. The firm's zoning application is seeking a one-for-one replacement of apartments with hotel rooms.

Mr. Schwartz says the firm has already held preliminary talks with several hotel companies, which he declines to identify. He said a timetable for the project has not been fixed. If the project moves forward, existing residents of the building would eventually be relocated to one of the other three towers, he says.

The hotel plan is an unexpected twist in a redevelopment of the massive complex, which Waterton and its investment partner, California State Teachers' Retirement System, bought last year for $475 million, the largest apartment building sale in 2007 nationwide.